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MD Buyline Recommends Incorporating Clinical Considerations into Healthcare Equipment and Technology Investments

Featured in hfm Magazine, MD Buyline's “The New Break-Even Analysis” expands the scope and assumptions of traditional investment decision-making criteria.

"Hospitals and health systems that contemplate an investment in new equipment or technology typically estimate procedure volume, payment rates, and the useful life of the equipment to determine how long it will take to recoup that investment. That information has allowed these organizations to make reasonably accurate revenue projections for purposes of conducting a break-even analysis and making a capital acquisition decision. But changes in the economic and legislative environment are complicating the capital acquisition landscape. These environmental changes are making it imperative for break-even calculators to evolve based on new assumptions and for providers to start having in-depth discussions about nonfinancial factors as a routine part of their break-even analysis," according to James Laskaris, emerging technology analyst and co-author of the featured story, and Katie Regan, clinical publications manager and co-author.

MD Buyline recognized equipment and technology decisions are directly impacted by the changing legislative and economic landscape. Healthcare providers need to re-evaluate the assumptions that underlie their break-even analysis and incorporate clinical aspects into their decisions.

In the featured story, MD Buyline addresses the four main areas of the new break-even analysis:

  • Cost
  • Utilization
  • Payment and margins
  • Clinical considerations

Cost, utilization and payment and margins are part of traditional break-even calculations; however, in today’s financial environment, there are now additional factors that may come into play (e.g., length of stay, payment rates tied to utilization, never events, and penalties for readmissions). Value analysis teams should adjust calculations accordingly. The clinical considerations section is entirely new for break-even calculations, and it will be a critical element for value analysis teams to make financially viable technology acquisitions.

MD Buyline’s clinical analysts work with healthcare providers across the nation to target the right technology for their hospital’s unique needs. Through one-on-one consultations, MD Buyline’s clinical analysts evaluate technologies and perform customized break-even analyses for its hospital members.

Download the complimentary story “The New Break-Even Analysis.”

About MD Buyline

Healthcare providers recognize MD Buyline as the leading provider of evidence-based information and research. By creating transparency and fostering consultative relationships, MD Buyline has partnered with providers for more than three decades to identify cost reduction opportunities for purchased services, consumables, capital and IT. Providers rely on MD Buyline’s data and clinical analysts for financial and clinical insight to reach long- and short-term goals. For more information, please visit www.mdbuyline.com, and follow MD Buyline on Twitter, @MDBuyline.

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